This stunning trend amongst crypto exchange tokens may be a massive red flag for investors

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Native platform tokens aimed at increasing the efficiency and decreasing the costs associated with interacting with crypto exchanges have garnered significant popularity amongst investors in recent times, with their overt utility boosting transaction volumes and making them attractive to investors.

In spite of this, data regarding the concentration of these tokens amongst so-called “whales” is quite alarming, signaling that these tokens may be highly prone to seeing manipulation.

It also damages the investment proposition that these tokens possess, as it makes it highly unclear as to whether or not their growth is organic or artificial.

Crypto exchange tokens garner massive popularity

Exchange tokens are a relatively new class of digital assets that have gained immense popularity and have drawn billions of dollars’ worth of investors’ capital throughout the past few years.

Currently, some of the largest cryptocurrencies by market capitalization are platform-specific tokens.

Binance Coin (BNB) has seen significant growth throughout the past couple of years, with its market cap ballooning from $10 million in mid-2017 to highs of nearly $5.5 billion in mid-2019, before declining slightly to its current size of over $2 billion.

UNUS SED LEO – the token associated with Bitfinex – rapidly gaining an over $1 billion market cap after launching in the summer of 2019.

A handful of other exchange cryptos occupy positions amongst the largest cryptocurrencies, with Huobi Token, Crypto.com Coin, OKB, and FTX Token all having significant popularity amongst investors.

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